Podcast Summary: The Journal – "Trump 2.0: Where Is The Economy Headed?"

Release Date: April 25, 2025
Hosts: Kate Linebaugh and Molly Ball
Guest: Greg Ip, Chief Economics Commentator, The Wall Street Journal

1. Introduction & Episode Overview

In this episode of The Journal, hosted by Kate Linebaugh and Molly Ball, the discussion centers around former President Trump's economic policies, particularly his use of tariffs, and their impact on the current U.S. economy. The hosts delve into market behaviors, consumer confidence, and the looming threat of a recession, supported by expert insights from Greg Ip.

2. Trump’s Economic Policies and Tariffs

Kate Linebaugh initiates the conversation by highlighting Trump's campaign promises: "fix the economy, bringing down inflation, restoring manufacturing," with tariffs being a key tool in his arsenal.

Molly Ball responds, stating, "[Trump's tariffs] don't seem to be going great... his approval rating on the economy has especially dropped" (03:16).

3. Current Economic Landscape

Greg Ip provides an analysis of the present economy, contrasting market volatility with stable economic indicators: "the economy since Trump became president looks a lot like the economy when Biden was still president" (04:01). He notes steady job growth and minimal inflation despite aggressive tariff policies, suggesting that foundational economic metrics remain robust.

4. Impact of Tariffs on the Economy

The discussion shifts to the specific tariffs on Chinese imports, currently set at 145%, with reports suggesting a potential reduction to around 50%. Greg Ip explains the implications: "It would still be a very big hit to the economy... making it very expensive to operate any business in the United States that uses those products" (07:05). He emphasizes the delayed effect of tariffs, as existing inventory absorbs the immediate impact.

5. Consumer Confidence vs. Economic Indicators

Molly Ball raises a critical point about the disparity between economic data and consumer sentiment: "The vibes of the economy are bad. Is that what that means..." (08:27). Greg Ip compares the current disconnect to the previous administration, suggesting that pervasive negative news influences public perception irrespective of stable economic indicators.

6. Interest Rates and Fed Chair Tensions

The conversation turns to the Federal Reserve and interest rates. Greg Ip discusses President Trump's pressure on Fed Chair Jerome Powell: "the President threatens very aggressive action... he would fire him" (10:01). This tension introduces uncertainty into the markets, undermining confidence in economic stability.

7. Market Reactions and Policy Adjustments

Kate Linebaugh references headlines about market downturns and questions the influence of markets on Trump's policies. Greg Ip responds by highlighting the significant role market reactions play in policy adjustments: "the markets improve" following tariff pauses (11:28). This interplay signifies the administration's responsiveness to market feedback.

8. Listener Question on Long-term Tariff Effects

A listener, Kobe Brown, inquires about the sustainability of Trump's tariff policies and their long-term impact on manufacturing. Greg Ip addresses this by asserting that higher tariffs will persist, especially on key industries: "we will end up with higher tariffs than we did before" (15:19). He acknowledges some positive outcomes, such as increased domestic investment, but warns of broader economic inefficiencies.

9. Administration’s Internal Conflicts on Tariffs

Molly Ball discusses internal disagreements within the Trump administration regarding tariff strategies. Greg Ip points out the lack of clear long-term goals due to the uncertainty of Trump's tenure: "the lack of certainty... is a major impediment to these policies having the intended long term effect" (17:08). This internal conflict hampers the effectiveness of tariff-induced economic reforms.

10. Prediction of Recession

Forecasting the economic future, Greg Ip shares that the consensus among economists is a 45% probability of a recession within the next year, up from 25% previously (18:52). Despite this, he personally remains optimistic, attributing resilience to the economy's inherent self-correcting mechanisms.

11. Controversy around Defense Secretary Pete Hegseth

Shifting focus, the hosts address a controversy involving Defense Secretary Pete Hegseth sharing sensitive military information in a group chat. Molly Ball reports the ensuing fallout, including firings and public criticism from within the Pentagon: "there is a feeling like there's still a problem at the Pentagon... he's not out of the woods yet" (20:50). This incident underscores ongoing instability within the administration's ranks.

12. Future Episodes and Wrap-Up

As the episode concludes, the hosts tease the next episode's focus on Trump's first 100 days, signaling an ongoing exploration of his administration's policies and their ramifications.

Notable Quotes with Timestamps

• Molly Ball (03:16): "The tariffs themselves are extremely unpopular. So it's possible that there is a long term strategy here that we're just not seeing. But in the moment, it doesn't seem to be going great."

• Greg Ip (04:01): "The economy since Trump became president looks a lot like the economy when Biden was still president. Job growth is chugging along."

• Greg Ip (07:05): "It would still be a very big hit to the economy if we had a lasting 50% tariff on China... making it very expensive to operate any business in the United States that uses those products."

• Molly Ball (08:27): "The vibes of the economy are bad. Is that what that means and are there consequences to that or is it just a vibe?"

• Greg Ip (10:01): "The President threatens very aggressive action... he would fire him. This is a whole new level of uncertainty and tumult that the market is just not used to."

• Greg Ip (15:19): "However all these tariff negotiations end up, we will end up with higher tariffs than we did before... making it very expensive to operate any business in the United States that uses those products."

• Greg Ip (18:52): "The consensus is that we won't have a recession, but it's a very high risk. I think the economy will probably make it through the year without a recession."

Conclusion

This episode of The Journal provides a comprehensive analysis of the current economic climate under Trump's influence, examining the effectiveness and repercussions of his tariff policies. Through expert commentary and insightful discussions, listeners gain a nuanced understanding of the complexities shaping the U.S. economy today.

Timestamps

• [03:16] - Discussion on Trump's tariffs and approval ratings
• [04:01] - Greg Ip on the current state of the economy
• [07:05] - Impact of potential tariff reductions on Chinese imports
• [08:27] - Consumer confidence vs. economic indicators
• [10:01] - Tensions between Trump and Fed Chair Jerome Powell
• [15:19] - Listener question on long-term effects of tariffs
• [18:52] - Prediction of a potential recession